Automotive industry in Canada

The automotive industry in Canada consists primarily of assembly plants of foreign automakers, most with headquarters in the United States or Japan, along with hundreds of manufacturers of automotive parts and systems.

Canada is currently the tenth-largest auto producer in the world, producing 2.1 million cars a year, down from seventh place with 3 million per year a few years ago. China, Spain, India, Brazil, Mexico recently surpassed Canadian production for the first time. Canada's highest rankings ever was second largest producer in the world between 1918 and 1923 and third after World War II.

The first large-scale production of automobiles in Canada took place in Walkerville, Ontario, near Windsor, in 1904. In the first year of operations, Gordon McGregor and Wallace Campbell, along with a handful of workmen produced 117 Ford Model Cs at the Walkerville Wagon Works factory.

Through marques such as Brooks, Redpath, Tudhope, McKay, Galt Gas-Electric, Gray-Dort, Brockville Atlas, Russell (CCM), and McLaughlin, Canada had many domestic auto brands. In 1918, McLaughlin was bought by an American firm, General Motors, and was re-branded General Motors of Canada. In the 1930s, Studebaker built its Rockne in Canada.

Driven by the demands of World War I, Canada's automotive industry had grown, by 1923, into the second-largest in the world, although it was still made up of relatively inefficient plants producing many models behind a high tariff wall. High consumer prices and production inefficiencies characterized the Canadian auto industry prior to the signing of the Canada–United States Automotive Products Agreement.

The 1964 Automotive Products Trade Agreement or “Auto Pact” represents the single most important factor in making the Canadian automotive industry what it is today. Key features of the Auto Pact were the 1:1 production-to-sales ratio and Canadian Value Added requirements.